Gross written premium and profit up in 2011

Sabre chief executive Keith Morris has attributed his company’s ability to buck the trend in UK motor results to its tight focus and appetite for less commoditised business.

The specialist UK motor insurer has the best motor combined ratio in the UK, having posted a market-beating 79.7% for 2010, undercutting even Admiral’s 2010 group ratio of 89% (83.5% for UK motor alone). Profit before tax came in at £25.9m, 33% lower than 2009’s £38.8m. But the 2009 results were bolstered by a £16.7m one-off reserve release, prompted by a change in HMRC rules for surplus claims reserves and higher investment returns.

Sabre’s performance comes at a time when most motor insurers are posting large underwriting losses as a result of rising bodily injury claims and, in some cases, the need to bolster reserves against this claims inflation.

“This is all we do,” Morris said. “Most other insurers have got other lines of business, and haven’t got quite such a clean focus. We also tend to write the more difficult risks. There is no doubt we are in areas of business where other people are not so keen and where there is not quite so much competition.”

While acknowledging that Sabre is seeing an inflation of bodily injury claims – in both the number of claims themselves and claimants – Morris said the company had the situation under control. “We are putting our rates up adequately to cover those issues,” he said. “We are pretty happy overall that we can contain these problems.”

Sabre put through cumulative rate increases of 40% during 2010. This was the main reason for the 58% increase in gross written premium (GWP) to £156.9m in 2010 from £99.1m in 2009.

Morris said 2011 is shaping up well for Sabre, with increases in both GWP and profit. But he insists profit is the focus. “It wouldn’t bother me if we saw the top line reduce, provided we could maintain or improve the bottom line.”